Planning,Budgeting, and Health Care Performance in Ukraine

Abstract

The Government of Ukraine has not pursued health care reforms now commonplace in the rest of Europe and Central/Eastern Europe that rely less upon centralized, state delivery of services and more on decentralized operational responsibilities and competition for services that increase patient choice. The Ukrainian health sector suffers from personnel overspecialization and facility overcapacity, resulting in high-cost, low productivity services. Budget funds are unavailable for operations and maintenance resulting in poor quality services. The state provides health care as a constitutionally-protected monopoly, relying on the traditional command and control model which ignores cost/quality competition options and responsibilities to patients. Overall, the system which produces these results is over-centralized, requiring achievement of physical service norms without providing sufficient funds. The centralized system does not monitor or evaluate services beyond narrow financial accountability and control requirements. The health care system is paradoxically over-centralized but unable to regulate or control local health care official decisions to ensure compliance with national standards. Needed are reforms in the health care policy and operational areas to produce the supply of services needed for national economic recovery. In the short-term, the budgetary framework can be improved as an operational/management guide through development of comparative information on results. Most of this information can be based on the economic classification consistent with the chart of accounts. Funding stability can be increased to improve expenditure control by implementing a new fiscal transfer formula that provides discretion (i.e., block grants) and performance criteria (i.e., outcome measures). In the medium-term, building on the technical foundation of physical norms and statistical reporting, the health care budgeting and financial management system should shift emphasis to: program planning, policy and management analysis, and public communications. The results of these reforms should lead to decentralized health care operations, service analysis, and delivery responsibilities. At the same time, the reforms should lead to proper centralization of responsibilities for strategic policy decisions, safety regulation, national standards, and program evaluation.     

COMPETITION OR MONOPOLY? COMPARING PRIVATIZATION OF LOCAL PUBLIC SERVICES IN THE US AND SPAIN

Differences in national traditions of public intervention, institutional arrangements and public service markets make local public services an area of great diversity. In this paper we undertake a comparative study of how local governments arrange for delivery of water and waste services in the US and Spain. We find levels of privatization are higher in Spain than in the US. We review organizational reform in the two contexts and compare service delivery data using national surveys from each country. We find lower and less stable privatization in the US stems in part from adherence to public choice emphasis on the benefits of market competition over public monopoly. By contrast, Spanish municipalities reflect an industrial organization approach, and create hybrid public/private firms which benefit from both market engagement and economies of scale available under monopoly production. We conclude that managing monopoly may be more important than competition in local service delivery.     

INTERROGATING INSTITUTIONAL CHANGE: ACTORS' ATTITUDES TO COMPETITION AND COOPERATION IN COMMISSIONING HEALTH SERVICES IN ENGLAND

Since the beginning of the 1990s the public healthcare system in England has been subject to reforms. This has resulted in a structurally hybrid system of public service with elements of the market. Utilizing a theory of new institutionalism, this article explores National Health Service (NHS) managers' views on competition and cooperation as mechanisms for commissioning health services. We interrogate the extent of institutional change in the NHS by examining managers' understanding of the formal rules, normative positions and frameworks for action under the regime of the Health and Social Care Act 2012. Interviews with managers showed an overall preference for cooperative approaches, but also evidence of marketization in the normative outlook and actions. This suggests that hybridity in the NHS has already spread from structure and rules to other institutional pillars. The study showed that managers were adept at navigating the complex policy environment despite its inherent contradictions.     

The relationship between competition and efficiency of waste-collection services in the Czech Republic

This paper examines the role of the competition on the waste-collection market. Based on the case study of the Czech Republic, we evaluate the influence of competition intensity on supply side of the market on efficiency of waste-collection services. The rate of competition was approximated by the number of submitted bids to public tenders and efficiency was measured by per capita expenditures for municipal waste-collection services. We developed two regression models – the first model verified a competitive effect on the public procurement market for the provision of waste-collection services; the second model identified factors that affected municipal expenditures for waste-collection services per capita. We concluded that the competition in the waste-collection market increases by organising open tenders for suppliers at regular intervals, by adapting the duration of contracts to economic life of fixed assets, by sustaining pressure on service providers through a change in suppliers or the distribution of contracts among jurisdictions.     

Public Administration Reform in a Challenging Environment: A Review of the Establishment of the Health Economics and Financing Directorate (HEFD) within the Afghanistan Ministry of Public Health

The purpose of this article is to provide an example of recent public administration reform in Afghanistan. In 2003, the Afghan Ministry of Public Health (MoPH) established the Basic Package of Health Services (BPHS) and other health services. To date, service delivery has been conducted largely by NGOs, funded by the main international donors, and managed by the Grant and Contracts Management Unit (GCMU) of the MoPH. Despite these advancements, Afghanistan continues to face significant challenges in health service provision and policy. In 2009, the GCMU was restructured into the Health Economics and Financing Directorate (HEFD), which broadened the scope of the Unit to conduct important economic analyses. This article examines the MoPH's role in health financing as a developing institution engaged in applied health economics and policy analysis. This development will allow the MoPH to build evidence for policy-making and further establish its stewardship role in the health sector.     

Health care cost escalation in the united states: Implications of market failure

Much of the rhetoric in the debate over health care reform suggests reconfiguring the health care system so that the free market forces can work efficiently. This paper will show that hopes for a free market solution to the maldistribution of health care are false. The free market system cannot work at the same level of efficiency for health care as it does in the distribution of other goods and services. Health care presents an anomaly to the free market system, making optimal and efficient distribution virtually impossible. That failure of the market system has led to a crisis of disparity in health care access and delivery in the United States.     

Competitive Tendering In Local Government: A Review Of Theory And Evidence

The introduction of compulsory competitive tendering in UK local government reflected conventional public choice theories of bureaucracy. These theories suggest that competition for service contracts will lead to lower expenditure and higher efficiency. Extensions and criticisms of the classical public choice model yield very different conclusions. First, the problems of bureaucratic supply are less severe than originally assumed, and secondly competition may itself generate new problems such as transaction costs, erosion of trust between principals and agents, and rent seeking. The impact of competition on spending and efficiency is therefore indeterminate, and must be established empirically. However, studies which evaluate the effects of competitive tendering in local government are few in number, cover a limited range of services, and are methodologically flawed. Therefore neither the initial imposition of competitive tendering by the Conservatives, nor its planned abolition by Labour, can be traced to a solid foundation of theoretical or empirical support. Theoretical and methodological problems that need to be resolved by further empirical studies are identified.     

Cooperation,not cost savings: explaining duration of shared service agreements

Among local governments, inter-municipal cooperation is the growing reform; but the literature is silent regarding the determinants of longer-term shared service agreements. We conducted a survey of all local governments in New York State in 2013 to assess the level of sharing across 29 public services. The duration of shared service agreements varies from 1 to 80 years. What explains this difference? Our hierarchical linear model shows that service sharing agreements fall along a cooperation continuum, where cost savings are a determinant of shorter agreements, while the public values of service quality and cross-jurisdictional coordination explain longer-term agreements. We also find that positive past experience with sharing partners increases the duration of sharing agreements. Our analysis lays the foundation for new theories of shared services that build directly from the benefits of improved regional coordination, inter-municipal reciprocity and service quality, not from theories based solely on competition and costs.     

The rise of risk assessment and risk management in the United Kingdom

This article examines the reform of the health care system in England in terms of the risk assessment and risk management. Three major health policies are examined, the Health of the Nation strategy, community care and the Patient's Charter. The article demonstrates that effective risk assessment and risk management is an important component of each initiative. The Health of the Nation strategy is based on epidemiological evidence on the nature of health risks and is linked to specific targets for the reduction of harm that require effective management of risks. Community care is a well established policy designed to provide long term and continuing support for vulnerable individuals in the community. With high profile incidents in the 1980s, there has been a greater emphasis on effective risk assessment and risk management, especially to protect the public. The Patient's Charter is designed to empower users of service.

Central to this strategy is informed consent. Effective empowerment depends of the provision of adequate information, especially on the risks of treatment. Although competent adults may formally be autonomous risk-taking decision-makers, their ability to assess risk and make decisions depends on having adequate information.     

EXIT AND VOICE IN LOCAL GOVERNMENT RECONSIDERED: A ‘CHOICE REVOLUTION’?

Market‐based public management reform has introduced customer choice among competing providers of public services. Choice entails exit, an option which Albert Hirschman famously reserved for the market, while voice is the key mode of communication in political life. Based on elite and mass surveys, the article studies how exit is perceived by citizens and local political and administrative leaders in Norway and Sweden, and how the two strategic options relate to each other. Citizens are more positive towards customer choice and exit than are leaders, albeit with some variation across different public service sectors. Political and administrative leaders are positive towards customer choice models as a strategy to empower clients but more critical in terms of the potential loss of accountability and control that contracting out services may entail.     

Political Influence on Public–Private Partnerships in the Public Health Sector in New Zealand

The purpose of this article is highlight the influences on the performance of public-private partnership organizations established to provide procurement services for public-sector organizations. The findings provide evidence of some values-based fracturing in public-private partnerships in the New Zealand public sector. However, it is the impact of political influence that illustrates significant potential to undermine effectiveness and efficiency. This case suggests there are innovative approaches which can be adopted—other than traditional models of public expenditure—yet still providing a sustainable public health service. Finally the case argues for the importance of appropriate political understanding of the changing scenarios.     

REFORMING PUBLIC SERVICES IN THE UK: BRINGING IN THE THIRD SECTOR

In the UK, the government continues its project to reform public services. Earlier projects have focused on the modernization of public sector organizations; in the latest round of reform, New Labour has focused on widening choice and the personalization of services. To this end, the government has been working with Third Sector (TS) organizations to expand their role in shaping, commissioning and delivering public services. The government’s vision is predicated on a normative assertion, that, unlike traditional public sector organizations, TS bodies create public value by being more innovative, are inspired by altruistic aims and values, and have greater commitment to their clients. This paper reviews recent policy and questions whether the government’s policy is flawed, contradictory and risks damaging the attributes of the TS admired by New Labour.     

The Fungibility of Health Aid: Reconsidering the Reconsidered

Lu et al. found that health aid displaces domestically-raised government health expenditure, which renders health aid at least partially fungible. These findings are questioned in The Fungibility of Health Aid Reconsidered. Van de Sijpe’s emphasis on disaggregating on- and off-budget aid is a valid contribution, although his empirical conclusions are overstated. We re-evaluate the data he criticises and find they sufficiently capture on-budget aid. To re-measure health aid fungibility, we update the Lu et al data, adding 23 countries and four years of data. Despite the confidence we have in these data, we employ two estimation specifications, each of which addresses the measurement error discussed by Van de Sijpe. The extended data and alternative methods show that development assistance for health channelled to governments remains significantly fungible.     

THE ENTERPRISE FORMULA,NEW PUBLIC MANAGEMENT AND THE ITALIAN HEALTH CARE SYSTEM: REMEDY OR CONTAGION?

Health care services represent an extraordinary experimental ground for introducing wider political and institutional transformations of the state. The adoption of entrepreneurialism into European health care systems has strengthened technocratic decision making over traditional mechanisms of political control. In Italy, in the midst of a severe legitimacy crisis affecting the administrative and political systems at the beginning of the 1990s, New Public Management ideas seemed ‘the’ remedy against the pathological politicization of distributive politics. Much hope has been placed since in a new and ascending group of general managers, entrusted with the ambitious mission of running health care services more efficiently and with the unenviable expectation of resuscitating public trust in welfare institutions. By analysing the 1992 Amato government’s landmark health care reform in its substantive changes, this paper explores the last decade’s main reform trajectories of Italian health care reforms that irreversibly transformed its institutional arrangements and organizational structure, namely the enterprise formula and the regionalization of the health care sector. The paper suggests that the political turmoil of 1992–94 served as catalyst for radical policy change and argues that the single most important explanation for the enactment of New Public Management‐type reforms rests in a new executive reinterpretation of its legislative prerogatives and function.     

Administrative and regulatory reform of Korea in a time of national crisis

Korea has undertaken all-out efforts to reform its economy and government to be ready for the new era of global competition and overcome the current economic crisis. Public sector reform seeks to liberalize the market economy by removing unnecessary government interventions in the private sector. The realization of the “four S's” - a small but strong government with the smarts to manage future uncertainties and a sensitivity to the people's needs - is the ultimate vision for the public sector reform. Regulatory reform calls for at least fifty percent of all government regulations eliminated by the end of 1998 and the rest of the regulations improved based on a set of rational principles. One key aspect of regulatory reform is focused on removing barriers to foreign direct investment. Epochal changes in the public sector including governmental regulations are expected to bring Korea up to global standards for business competition and government performance.     

Towards developing new partnerships in public services: users as consumers, citizens and/or co-producers in health and social care in England and Sweden

The causes and effects of marketization of public services have been analysed extensively in the literature, but there is relatively little research on how those policies impact on the development of new forms of governance, and the role of users in these new arrangements. This study reviews examples of competition, freedom of choice and personalized care in health and social services in England and Sweden, in order to examine the type of relationships emerging between the user/consumer vis-à-vis market driven providers and various agencies of the state under the marketized welfare. The article focuses on the possible roles users might assume in new hybrid arrangements between markets, collaborations and steering. A user typology: namely, that of a consumer, citizen, co-producer and responsibilized agent in various governance arrangements, is then suggested. The article concludes by arguing that pro-market policies instead of meeting the alleged needs of post-modern users for individualized public services are likely to promote a new type of highly volatile and fragile partnerships, and create a new subordinated user who has no choice but to ‘choose’ services they have little control over.     

Voice and choice in health care in England: understanding citizen responses to dissatisfaction

Using data from a five-year online survey the paper examines the effects of relative satisfaction with health services on individuals' voice-and-choice activity in the English public health care system. Voice is considered in three parts – individual voice (complaints), collective voice voting and participation (collective action). Exercising choice is seen in terms of complete exit (not using health care), internal exit (choosing another public service provider) and private exit (using private health care). The interaction of satisfaction and forms of voice and choice are analysed over time. Both voice and choice are correlated with dissatisfaction with those who are unhappy with the NHS more likely to privately voice and to plan to take up private health care. Those unable to choose private provision are likely to use private voice. These factors are not affected by items associated with social capital – indeed, being more trusting leads to lower voice activity.     

Introducing Purchaser/Provider Separation in the Catalan Health Administration: A Budget Analysis

This article examines the extent to which the Catalan reform launched in 1990 effectively introduced the purchaser/provider separation within the public health administration. The reform had two formulation sources: a law passed by the Catalan Parliament, which left this principle vague, and a further 'new public management' discourse, which interpreted the law in terms of a clear purchaser/provider separation. This study uses Dunleavy's (1991) analytical model of agency types to compare the impact of the reform on the budget structures of the health administration agencies affected — namely, the Department of Health and Social Security, the Catalan Health Service and the Catalan Health Institute. The data show that while the provider role was clearly defined and implemented, the purchaser role was not. Instead, the role of the health authority embodied the complex blend of functions established by the text of the law, which was also reflected in its budget structure, and which blurred the separation between purchaser and provider.     

Knowledge management and communities of practice in the private sector: lessons for modernizing the National Health Service in England and Wales

The National Health Service (NHS) in England and Wales has embarked upon a radical and far–reaching programme of change and reform. However, to date the results of organizational quality and service improvement initiatives in the public sector have been mixed, if not to say disappointing, with anticipated gains often failing to materialize or to be sustained in the longer term. This paper draws on the authors' recent extensive research into one of the principal methodologies for bringing about the sought after step change in the quality of health care in England and Wales. It explores how private sector knowledge management (KM) concepts and practices might contribute to the further development of public sector quality improvement initiatives in general and to the reform of the NHS in particular. Our analysis suggests there have been a number of problems and challenges in practice, not least a considerable naïvety around the issue of knowledge transfer and 'knowledge into practice' within health care organizations. We suggest four broad areas for possible development which also have important implications for other public sector organizations.     

Shared services in Brazilian local government: Urban development in small counties

In this article we break new ground by investigating cooperative agreements in urban development services, which include urban development, housing and sanitation for small local governments in Brazil (i.e., those with fewer than 20,000 residents in 2013–15). We find that public expenditure on urban development can be explained by both horizontal (intermunicipal cooperation) and vertical (public–public partnerships) cooperation. Regarding the impact of public sector cooperation on public expenditure, our results show that housing and sanitation services are less costly under intermunicipal cooperation. By contrast, urban development services are less costly when local authorities do not cooperate with other public entities. For public–public partnerships (with the state or federal government) cooperation leads to an increase in public funding, which implies that cooperative agreements might not lead to lower public expenditure. The findings in this article provide useful empirical insights into the administrative reorganization of Brazilian local government.